2017-2018 Budget Highlights

Click HERE for full budget text.

Overall, the compromise budget of 2017- 2018 treats teachers and education stakeholders better than most recent budgets. The entire budget spends $23 billion which represents a 3% increase over the 2016-2017 budget. $9 billion of the budget is funding for K-12 education which is an increase of 3.5% over the previous budget.

The highlight for teachers is a 3.3% pay raise for 2017-2018 and an average 9.6% raise for year 2018-2019. This is certainly good news to teachers. Salary schedules are posted at the bottom of this report. PENC is pleased to see serious increases to teacher salaries and looks forward to working with lawmakers moving forward.

Although there are items of concern to educators (which will be listed at the end of the budget highlights), the budget and subsequent policy is generally favorable to PENC members. Below is a summary of key items of interest from the budget.

Budget Highlights

The budget allocates $35.4 million dollars in new dollars for school-based administrator pay increases in 2017-2018, moving to $40.6 million in 2018-2019. The document creates a new Principal Salary schedule which places principals on a schedule based on ADM (average daily membership) and not meeting, meeting or exceeding school growth formulas. There are significant increases in Assistant Principal salaries by tying their pay to the teacher schedule, plus 17%. These changes are likely to be well received by school based personnel.

A $1,000 raise for central office personnel and non-certified school personnel is provided. In addition, $16.9 million in funding is added to increase the average rate of pay for school bus drivers. Also added is 3 Bonus Leave days for State and locally supported full-time employees, but will accrue no cash value at termination. Lastly , for retirees, there is a 1% cost-of-living increase added to the Teachers’ and State Employees’ Retirement System.

There has been much discussion about the School Performance Grades/ESSA Compliance. The budget provides a single accountability system for the purposes of state and federal requirements and uses a scale of A-F grades in compliance with ESSA requirements. It does not alter current 80/20 grade calculations and does not eliminate the 15 point scale in effect until 2019-2020.

A Pay-As-You-Go Capital and Infrastructure Fund is created that will utilize debt service savings for the purpose of additional debt service obligations and building and capital improvements.

$29 million in non-recurring funding is set aside in the budget for a School Business System Modernization Plan. In addition, $2.4 million in recurring funds is allocated for a Digital Learning Plan. Also, $700,000 in recurring and $3.5 million in non-recurring funds are granted for the Sixth and Seventh Grade Career and Technical Education Grant Program. This program awards competitive grants to school districts to expand CTE programs to sixth and seventh grade students.

Also included in the budget is continued commitment to long standing programs such as $3 million in recurring funds in 2017-2018 for NC Pre-K to serve an additional 1,725 children, and $6.1 million in recurring funds in 2018-2019 to serve an additional 3,525 children. Monies were increased to $3.5 million in recurring funds to the Smart Start Reading Initiative in 2017-2108 and $7 million in 2018-2019. There is $250,000 in recurring funds for Early Childhood Education and $200,000 in recurring funds for Future Ready Students. The NC Center for the Advancement of Teaching (NCCAT) will get $300,000 in additional funding. There is $245,000 in recurring funds to reimburse the initial teacher licensure application fee for certain first time applicants. There is $450,000 in 2017-2018 and $6 million in 2018-2019 from the NC Education Endowment Fund to re-establish the Teaching Fellows Program targeting forgivable loans up to $8,250 per year for up to 4 years to qualifying teachers in special education and STEM licensure areas.

Below are some items of concern to educators. However, the impact of these changes will likely not be immediately evident.

The budget will eliminate future retiree medical benefits for new hires on or after January 1, 2021.

Added to the budget was $450,000 in 2017-2018 and $3 million in 2018-2019 to establish the North Carolina Personal Education Savings Account Program (ESAs). The program will create grants for eligible children with disabilities to be used for qualifying education related expenses including non-public school tuition. Parents of special needs children could receive up to $9,000 per year in a personal education account to be used for approved expenses. Initial funding is to establish the program in the first year with rewards being made available in the second year of the program.

There were targeted cuts to DPI including a $7 million reduction in funds to the central office allotment in 2017-2018, and $11 million in 2018-2019. In addition, a reduction in staff positions was included in addition to the funding cuts.

There was a $2.2 million reduction to Cooperative Innovative High School funding which oversees the Early College programs. This cut reduces all CIHS allotments from approximately $310,000 to $200,000 each.

The budget again includes recurring funding for a voucher program called Opportunity Scholarship and grants $10 million in increases to the Opportunity Scholarship Grant Fund Reserve over the next 10 years. The budget directs these voucher appropriations to continually be added to the base budget year over year.

New Teacher Salary Schedule

Years	2016-17 Current "A" Salary Schedule	Increase to Salary Schedule	2017-18 Proposed Salary Schedule	Increase with Step	% increase with Step
0	$35,000	$0	$35,000
1	$35,750	$250	$36,000	$1,000	2.9%
2	$36,000	$300	$36,300	$550	1.5%
3	$36,250	$1,050	$37,300	$1,300	3.6%
4	$36,750	$550	$37,300	$1,050	2.9%
5	$37,250	$1,050	$38,300	$1,550	4.2%
6	$38,000	$300	$38,300	$1,050	2.8%
7	$38,500	$800	$39,300	$1,300	3.4%
8	$39,000	$300	$39,300	$800	2.1%
9	$39,500	$1,050	$40,550	$1,550	4.0%
10	$40,250	$300	$40,550	$1,050	2.7%
11	$41,000	$1,050	$42,050	$1,800	4.5%
12	$41,750	$300	$42,050	$1,050	2.6%
13	$42,500	$1,050	$43,550	$1,800	4.3%
14	$43,250	$300	$43,550	$1,050	2.5%
15	$45,250	$300	$45,550	$2,300	5.3%
16	$45,250	$1,050	$46,300	$1,050	2.3%
17	$45,250	$2,050	$47,300	$2,050	4.5%
18	$45,250	$2,050	$47,300	$2,050	4.5%
19	$45,250	$3,050	$48,300	$3,050	6.7%
20	$48,000	$300	$48,300	$3,050	6.7%
21	$48,000	$1,300	$49,300	$1,300	2.7%
22	$48,000	$1,300	$49,300	$1,300	2.7%
23	$48,000	$2,000	$50,000	$2,000	4.2%
24	$48,000	$2,000	$50,000	$2,000	4.2%
25	$51,000	$300	$51,300	$3,300	6.9%
26	$51,000	$300	$51,300	$300	0.6%
27	$51,000	$300	$51,300	$300	0.6%
28	$51,000	$300	$51,300	$300	0.6%
29	$51,000	$300	$51,300	$300	0.6%
30	$51,000	$300	$51,300	$300	0.6%
31	$51,000	$300	$51,300	$300	0.6%
32	$51,000	$300	$51,300	$300	0.6%
33	$51,000	$300	$51,300	$300	0.6%
34	$51,000	$300	$51,300	$300	0.6%
35	$51,000	$300	$51,300	$300	0.6%
36	$51,000	$300	$51,300	$300	0.6%
37	$51,000	$300	$51,300	$300	0.6%

Submitted by Bryan Holloway
For information about specific issues, please contact lobbyist@pencweb.org.

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